Wednesday, October 12, 2016

Thursday Watch

Evening Headlines
Bloomberg:
  • China's Cooling Property Market May Risk Economic Growth. Actions by China’s policy makers to rein in property prices in the bubble-prone nation may prove so effective that the economy’s growth rate could be affected next year. At least 21 cities have introduced purchase restrictions and toughened mortgage lending since late September, reversing two years of easing to support home buyers. Goldman Sachs Group Inc. says more tightening is likely to follow if prices keep soaring, while Citigroup Inc. estimates shrinking demand may lead sales volume to contract in the fourth quarter. 
  • Asian Stocks Retreat as Commodity Shares Drop While Japan Gains. Asian stocks outside Japan fell for a third day as a stronger dollar weighed on commodity producers, while a weakening yen buoyed the Topix index. The MSCI Asia Pacific Index excluding Japan dropped 0.2 percent to 448.07 as of 8:07 a.m. in Hong Kong. Japan’s Topix index advanced 0.6 percent after the yen fell 0.7 percent on Wednesday.
  • OPEC-Russia Roadshow Heads to Vienna for Crucial Oil-Cuts Talks. (video) OPEC’s effort to secure cooperation of non-members in a global deal to curb crude output will roll on from Istanbul to Vienna, with Russia on board but growing internal differences over sharing the burden of cuts. Russia is ready to participate in a “technical exchange” to set a road map for oil production levels in the Austrian capital on Oct. 29, Energy Minister Alexander Novak told reporters Wednesday. Talks in Istanbul were positive and cooperation between members of the Organization of Petroleum Exporting Countries and other producers is now well established, said Qatar’s Energy Minister Mohammed Al Sada.
Wall Street Journal:
Fox News:
Zero Hedge:
Business Insider:
Telegraph:
Night Trading 
  • Asian equity indices are -.5% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 116.75 +5.75 basis points. 
  • Asia Pacific Sovereign CDS Index 34.25 +1.25 basis points.
  • Bloomberg Emerging Markets Currency Index 72.71 -.07%
  • S&P 500 futures -.06%
  • NASDAQ 100 futures -.03%.
Morning Preview Links

Earnings of Note
Company/Estimate 

  • (DAL)/1.66
  • (LNN)/.41
  • (PGR)/.33
  • (TSM)/3.68
  • (WGO)/.49
Economic Releases
8:30 am EST
  • The Import Price Index MoM for September is estimated to rise +.1% versus a -.2% decline in August.
  • Initial Jobless Claims for last week are estimated to rise to 253K versus 249K the prior week.
  • Continuing Claims are estimated to fall to 2050K versus 2058K prior.   
Upcoming Splits 
  • None of note
Other Potential Market Movers
  • The Fed's Harker speaking, ECB Decision, ECB press conference, $12B 30Y T-Bond auction, China CPI report, Bloomberg US Economic Survey for October, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (HPQ) analyst meeting, (ULTA) investor day and the (SAFM) investor conference could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by commodity and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

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